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New natural gas well being drilled

A Houston, Texas-based company broke ground last week on a $13.5-million natural gas well project near Natchez.

Mainland Resources is the only company in Mississippi currently drilling for natural gas in rock called shale at a depth of 22,000 feet. The company hopes its Burkley Phillips No. 1 well in the Buena Vista Prospect will be successful and followed by more than 200 others.

The company is taking a chance that there is an extension of the Haynesville shale near Shreveport, La.

“If it works, the shale zone could potentially have 225 locations on 80-acre spacing, and we’re also looking at potential shallower zones,” said Mike Newport, Mainland Resources CEO.

Newport said it will take six months to drill, and the project should create a number of jobs for the area, as it will utilize local equipment suppliers and require repairs to road and bridges.

There is a chance that the well might fail, but Mainland has confidence in the extensive amount of information it gathered from the Chevron Long well, which was drilled on the property in 1981.

“We have all the data you could have other than producing the well, or probably we wouldn’t be doing this,” Newport said.

In the past few years, technology has advanced to allow producers to extract gas from shale. Some analysts expect that gas from shale will greatly expand the worldwide energy supply.

“Chevron was drilling for a deeper formation of natural gas, but they encountered this high-pressure zone that they didn’t expect… The technology wasn’t there in the 80s to get at the shale. In just the last three years the technique has been perfected to where it will work,” Newport said.

The rock becomes increasingly harder to drill past 15,000 feet, which makes drilling deeper wells more expensive.

Upon completion of Mainland’s previously announced proposed merger with American Exploration Corp, Mainland will have a 92 percent working interest in the well, while Guggenheim Energy Opportunities Fund will have an 8 percent working interest.

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